SHARE
COPY LINK

POLITICS

Italy’s Meloni begins tricky government talks after election win

Italian far-right leader Giorgia Meloni and her allies on Tuesday began what is set to be a weeks-long process of forming a new government, with crises looming on several fronts.

Italy's Meloni begins tricky government talks after election win
(From L) Giorgia Meloni, Silvio Berlusconi and Matteo Salvini have begun talks on forming a government after their right-wing coalition won a majority at Sunday’s elections. Photo by Andreas SOLARO / AFP

Meloni’s post-fascist Brothers of Italy party, which triumphed in Sunday’s elections, has no experience of power but must assemble a cross-party team to tackle sky-high inflation and energy prices, and relations with a wary Europe.

The 45-year-old is hoping to be the first woman to lead Italy as prime minister, but needs her allies, Matteo Salvini’s far-right League party and former Silvio Berlusconi’s Forza Italia, for a majority in parliament.

The division of the top jobs – notably economy, foreign affairs, the defence and interior ministries – will always be political but now, more than ever, “will have to reflect areas of expertise”, the Stampa daily noted.

President Sergio Mattarella will begin consultations on who should lead the new government only once the Senate and Chamber presidents have been elected by parliament, which meets on October 13th.

In the past, it has taken anything between four and 12 weeks for a new administration to take office.

But the first deadline for action is coming up fast, with Italy due to submit its draft plan for next year’s budget to Brussels by October 15th.

READ ALSO: The five biggest challenges facing Italy’s new government

The parties have said they want to make major changes, with a manifesto promising to slash taxes, roll back welfare, and “revise” the terms of Italy’s recovery fund agreement with Brussels – potentially putting the rest of the deal, worth a total of almost 200 billion euros to Italy, at risk.

EU economy commissioner Paolo Gentiloni said he urged “the next Italian government to ensure that this opportunity is seized”, saying the fund was key to putting Italy on a path to “strong and durable growth”.

Agnese Ortolani, senior Europe analyst at the Economist Intelligence Unit, said she expected Meloni “to continue to reassure the markets by picking a non-controversial figure for the role of finance minister”.

“She will also want to avoid reputational damage by nominating someone who is not perceived as credible by the markets,” she said in a note.

READ ALSO: Doubts rise over ‘loose cannon’ Salvini after Italy’s election

Meloni’s allies have been pitching for heavyweight positions, Salvini wanting his old job as interior minister back, and Berlusconi eyeing president of the Senate.

Their parties’ disappointing performance in the polls, however, with neither reaching 10 percent while Brothers of Italy’s secured 26 percent, means Meloni may already be planning to sideline them.

League leader Matteo Salvini (L) and Fratelli d’Italia leader Giorgia Meloni are set to form a government together following the election. Photo by MIGUEL MEDINA / AFP

Salvini and Berlusconi do not see eye-to-eye with Meloni on several fronts, including on Russia and public spending to relieve the cost of living crisis.

With all the potential friction ahead, winning the elections “was almost the easy part”, commented Luciano Fontana, chief editor of the Corriere della Sera daily.

Berlusconi downplayed concerns he would rock the boat Tuesday, claiming his party was ready to make compromises “in the country’s interests”.

His ally Antonio Tajani, a former European parliament president, is tipped as possible foreign minister, an appointment which could both appease Berlusconi and assuage international fears that Meloni’s Eurosceptic populist party plans to pick fights with Brussels.

Salvini may prove more difficult. He is currently on trial for allegedly abusing his powers as interior minister in 2019 to block migrants at sea, which some say could rule him out returning to the job.

“It won’t be an easy relationship. It’s likely that (Salvini) will be given a more marginal role in the government than he wants,” Sofia Ventura, political sciences professor at Bologna University, told the foreign press association in Rome.

“Defusing Salvini” without sparking a backlash that could weaken the government is “Meloni’s first test”, the Repubblica daily said.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

MONEY

EXPLAINED: Why people in Italy might have to carry more cash from now on

Under Italy’s new budget law, retailers will no longer be fined for refusing card payments on amounts lower than €30 – a controversial move that is expected to have a knock-on effect for shoppers.

EXPLAINED: Why people in Italy might have to carry more cash from now on

Italy’s new budget bill, whose full text was made available to the media on Wednesday, is set to add yet another controversial chapter to the country’s long and troubled history of card payment laws.

According to a clause included in the 2023 budget law, fines for retailers refusing card payments on amounts lower than €30 will now be suspended until at least June 2023.

As set out by the bill, the six-month suspension will allow the newly created Ministry of Enterprises and Made in Italy to “establish new exemption criteria” and “guarantee the proportionality of the given penalties”. 

READ ALSO: Key points: What Italy’s new budget law means for you 

And, though it isn’t yet clear what new exemptions the government is currently considering nor what exactly is meant by “proportionality”, what’s certain is that residents will now have to repopulate their pockets with some good old banknotes because businesses – from taxi drivers to cafes and bars might not accept card payments for small amounts.

Fines for businesses caught refusing card payments had been introduced by Draghi’s administration back in June 2022, with retailers liable to pay “a €30 administrative fee plus four percent of the value of the transaction previously denied”, regardless of the amount owed by the customer. 

Euro banknotes in a wallet

Under Italy’s new budget law, retailers will no longer be forced to accept card payments for transactions under €30. Photo by Ina FASSBENDER / AFP

But, the measure had quickly sparked outrage among retailers, who lamented having to pay hefty bank commissions on every electronic transaction – some business owners even went as far as openly defying the law and organised themselves into a No-Pos Committee (Comitato No Pos). 

Given the latest developments, it seems like their efforts might just have paid off. 

But, while many business owners will surely be happy with the suspension, others across the country have already raised doubt about the potential ripple effects of the government’s move.

Aside from shoppers having to begrudgingly carry more cash than they’re currently used to, many political commentators are warning that the suspension might be a “gift to tax dodgers” in a country where, according to the latest available estimates, tax evasion costs state coffers nearly €90 billion a year.

READ ALSO: EXPLAINED: What’s changing under Italy’s post-pandemic recovery plan? 

It’s also worth noting that the introduction of fines for businesses refusing card payments was one of the financial objectives set out within Italy’s Recovery Plan (PNRR), which expressly refers to the fight against tax evasion as one of the country’s most urgent priorities. 

It is then likely that the new cabinet will at some point have to answer for the latest U-turn on Recovery Plan policies in front of the EU Commission.

SHOW COMMENTS